Borrowers Taking Out Larger Mortgages – Based on the Commerce Department and the National Association of REALTORS® reports, home prices are rising by double-digit numbers, causing increasing concerns around housing affordability. The Commerce Department reported that median sales prices for new homes rose nearly 19% in November, while the National Association of REALTORS® reported existing-home prices jumped by a median of 13.9% annually last month. As home prices press higher, so is the amount that home buyers are borrowing to pay for a house. The average amount borrowed to finance a home purchase climbed to $414,115 in November, the Mortgage Bankers Association reports. Housing analysts say a lot of the housing activity lately has been concentrated on the higher end, which could be skewing mortgage amounts higher. But higher home prices and bidding wars have prompted many buyers to stretch their budgets.
Source and link to the full article: “This Was the Average Mortgage Taken Out in November. Can You Afford It?” The Ascent/Motley Fool (Dec. 22, 2021)
Bidding Wars Drop to 11-Month Low but Remain Prevalent – According to Redfin’s competition index, home buyers may be facing less competition, but they are also finding fewer homes for sale. In November, 59.5% of home offers written by Redfin real estate professionals reported facing competition, the lowest in 11 months. That’s a sharp drop from the 74.6% peak reached in April. Make no mistake, bidding wars are still happening and buyers should still be prepared to face one. But the lessening in buyer competition lately appears to be following a more seasonal pattern for the housing market. “It’s typical for competition to ease in the winter months as more families take time off for the holidays,” says Daryl Fairweather, Redfin’s chief economist. “While competition waned in November, it was still higher than a year earlier, which is a sign that demand will be strong in the new year.”
The following chart from October’s REALTORS® Confidence Index Survey shows the average number of offers received on sold homes.
Source and link to the full article: “Homebuyer Competition Drops to Lowest Level in Nearly a Year in November,” Redfin (Dec. 17, 2021) and “REALTORS® Confidence Index Survey, October 2021,” National Association of REALTORS®
First-Timers Reevaluate, Devise Plan to Compete in 2022 – Based on a new survey by realtor.com®, the ultra-competitive housing market may be particularly tough on first-time home shoppers. First-time buyers don’t have the equity of a previous home to sell to help fund their next house purchase. They must rely on savings and the amount they need has been quickly growing. Home prices have climbed by double-digits annually over the past year alone. More than a quarter of hopeful first-time house hunters were unsuccessful at purchasing a home in 2021, shows a new survey of 500 aspiring first-time home shoppers conducted by realtor.com®. “Despite a challenging year, aspiring first-time home buyers are surprisingly optimistic about 2022,” says George Ratiu, manager of economic research at realtor.com®. “They’re looking at the new year as a fresh opportunity to make their dreams of owning a home come true and our survey suggests that they’re armed with information and ready to compete for their first home.”
Source and link to the full article: realtor.com®
Housing Starts Pick Up as 2021 Comes to a Close – According to the National Association of Home Builders latest report, buyers have been drawn to new-home construction as existing housing inventories remain lean. Builders have struggled to ramp up construction even more due to the high demand as building materials, labor, and lot shortages loom. However, builders say they’re building as much as they can and as quickly as they can given such challenges. Housing starts for both single-family and multifamily homes rose 11.8% to a seasonally adjusted annual rate of 1.68 million units in November, the U.S. Department of Housing and Urban Development and U.S. Census Bureau reported recently. Broken out, single-family housing starts increased 11.3% to a 1.17 million annual rate while the multifamily sector, which includes apartment buildings and condos, climbed 12.9% to an annual 506,000 pace.
“Single-family housing starts accelerated near the end of 2021 and are up 15.2% this year-to-date as demand for new construction remains strong due to lean inventory of resale housing,” says Chuck Fowke, chairman at the National Association of Home Builders. “Policymakers need to help alleviate ongoing building material supply chain bottlenecks that are preventing builders from keeping up with buyer demand.”
Source and link to the full article: National Association of Home Builders